Qualifying Facilities

The Public Utilities Regulatory Policies Act of 1978 (“PURPA”) mandated that electric utilities have the obligation to purchase power from, and interconnect with, qualifying facilities (“QF” or “QFs”). A QF is a facility that falls into one of two categories: (1) a small power production facility with a net capacity of 80 Megawatts (“MW”) or less whose primary energy source is renewable (hydro, wind or solar), biomass, waste, or geothermal resources; or (2) a cogeneration facility that sequentially produces electricity and another form of useful thermal energy (such as heat or steam) in a way that is more efficient than the separate production of both forms of energy.

learn more about our qualifying facilities program

How do QFs work?

A Power Purchase Agreement (“PPA”) is required for QFs to receive payment for the output of their facility. Pricing is based on avoided cost, which is the incremental cost to an electric utility of electric energy or capacity which, but for the purchase from the QF, such utility would generate itself or purchase from another source.

What obligations are involved with QFs?

QFs may sell their output directly to organized markets or utilities. Golden Spread is a utility for this purpose and is required to purchase QF output but Golden Spread’s Members are not required to do so pursuant to FERC Docket EL16-62. Any inquiries about purchases of QF power should be made to Golden Spread and not its Members. QFs will also need to execute an interconnection agreement. Depending on the type of interconnection, the Agreement could be with either Golden Spread or one of its Members.

QFs have the right to purchase supplementary power, back-up power, maintenance power, and interruptible power from Golden Spread’s Members at rates which are just and reasonable.

Golden Spread has no obligation to purchase from QFs located in ERCOT with a net capacity greater than 20MW on a service territory-wide basis pursuant to FERC Docket QM16-3.